Questions and Answers of Managerial Accounting Creating

Refer to the data in Exercise 10-31, regarding Canandaigua Container Company. Prepare journal entries to: 1. Record the purchase of direct material on account.2. Add direct-material and direct-labor
Refer to your answer for Exercise 10-41. Set up T-accounts, and post the journal entries to the general ledger.Data From Exercise 10-41:-Refer to the data in Exercise 10-31, regarding Canandaigua
During March Manhattan Fabrics Corporation manufactured 1 .000 units of a special multilayer fabric with the trade name Stylex. The following information from the Stylex production department also
Valport Valve Company manufactured 15,600 units during March of a control valve used by milk processors in its Shreveport plant. Records indicated the following:The control valve has the following
The director of cost management for Peoria Instrument Corporation compares each month's actual results with a monthly plan. The standard direct-labor rates for the year just ended and the standard
What is meant by the term operational budgets? List three operational budgets that would be prepared by a hospital.
Explain the concept of zero-base budgeting.
Choose a city or state in the United States (or a Canadian city or province), and use the Internet to explore the annual budget of the governmental unit you selected. For example, you could check out
Village Hardware is a retail hardware store. Information about the store's operations follows.• November 20x4 sales amounted to $$400,000$ .• Sales are budgeted at $$440,000$ for December
Three Rivers Dental Associates is a large dental practice in Pittsburgh. The firm's controller is preparing the budget for the next year. The controller projects a total of 48,000 office visits, to
Andrew and Fulton, Inc. uses 840 tons of a chemical bonding agent each year. Monthly demand fluctuates between 55 and 85 tons. The lead time for each order is one month, and the economic order
Shady Shades, Inc. manufactures artistic frames for sunglasses. Talia Demarest, controller, is responsible for preparing the company's master budget. In compiling the budget data for 20x1, Demarest
School Days Furniture, Inc. manufactures a variety of desks, chairs, tables, and shelf units which are sold to public school systems throughout the midwest. The controller of the company's Desk
Edgeworth Box Corporation manufactures two types of cardboard boxes used in shipping canned food, fruit, and vegetables. The canned food box (type C) and the perishable food box (type P) have the
Refer to the original data given in Problem 9-48 for Fiber Technology, Inc.Required: Prepare a graphical analysis of the economic order quantity decision for XL-20.Data From Problem 9-48:-Fiber
Dallas Auto Glass is a regional distributor of automobile window glass. The windshields are manufactured in Mexico and shipped to Dallas. Management is expecting an annual demand of 10,800
Jay Rexford. president of Photo Artistry Company, was just concluding a budget meeting with his senior staff. It was November of 20x4. and the group was discussing preparation of the firm's master
How did Disney change its approach with the production of Lilo and Stitch! "At Disney, String of Weak Cartoons Leads to Cost Cuts: Disney Puts Lilo and Stitch on a Tight Budget," The Wall Street
What are the implications of this phenomenon for sales forecasting in the process of preparing Intel's master budget? "Facing Computer Slowdown, Intel Boosts Focus on Consumer Devices," The Wall
How will rising fuel costs affect the budgeting process for airlines like American and US Airways?Would there be other effects on the airlines' budgets from generally higher oil prices, besides their
Refer to the data given in the preceding exercise. (Ignore income taxes.)Required:1. Prepare a fully labeled profit-volume graph for the Dallas Armadillos.2. What is the safety margin for the
Pacific Rim Publications, Inc. specializes in reference books that keep abreast of political and economic issues in the Pacific Rim countries. The results of the company's operations during the prior
Refer to the income statement given in the preceding exercise. Prepare a new contribution income statement for the La Jolla Inn in each of the following independent situations. (Ignore income
Surreal Sound. Inc. manufactures and sells compact disks. Price and cost data are as follows:In the following requirements, ignore income taxes.Required:1. What is Surreal Sound's break-even point in
Korosa and Delancey, Ltd. is studying the acquisition of two electrical component insertion systems for producing its sole product, the universal gismo. Data relevant to the systems follow.Korosa and
Phoenix-based CompTronics manufactures audio speakers for desktop computers. The following data relate to the period just ended when the company produced and sold 42,000 speaker sets:Management is
The Asian Division of Worldwide Reference Corporation produces a pocket dictionary containing popular phrases in six Asian languages. Annual budget data for the coming year follow. Projected sales
Discuss these questions as a group. Is the break-even concept being used appropriately by the politicians?Should the government subsidize Amtrak or the major airlines if they don't break even?
How do an airline's cost structure and its basic business model affect its ability to manage costs and charge competitive rates? "To Redress Industry Blues, Delta Turns to Song," The Wall Street
Using the concept of cost structure, explain the phenomenon mentioned above. "It's Time to Cash In Some Chips, Big Blue," Business Week, June 3, 2002, p. 43, Spencer E. Ante. Overview As the article
What is operating leverage and how does high operating leverage affect a company? "Reliance Group May See Shield from Creditors," The Wall Street Journal, August 15, 2000, Devon Spurgeon, Gregory
Why would outsourcing result in a "more variable cost structure" for Levi Strauss? "Levi Will Cut 20% of Work Force, Shut Six Plants in Restructuring," The Wall Street Journal, April 9, 2002, Teri
Explain the impact of an increase in the level of activity (or cost driver) on (a) total fixed cost and (b) fixed cost per unit of activity.
Indicate which of the following descriptions is most likely to describe each cost listed below. Description Engineered cost Committed cost Discretionary cost Costs Annual cost of maintaining an
Distinguish between simple regression and multiple regression.
What impact have advances in manufacturing technology had on the problem of cost estimation?
Brazilia Bus Tours has incurred the following bus maintenance costs during the recent tourist season. (The real is Brazil's national monetary unit. On the day this exercise was written, the real was
Visit the website of one of the following companies, or a different company of your choosing.Required: Read about the company's products and operations. Then list five manufacturing costs that the
Refer to the data in the preceding exercise.Required:1. Draw a scatter diagram and graph the company's energy cost behavior using the visual-fit method.2. Predict the energy cost for a month in which
Recent monthly costs of providing on-board flight service incurred by New England Airlines are shown in the following table.Required:1. Use least-squares regression to estimate the cost behavior of
Jefferson County Airport handles several daily commuter flights and many private flights. The county budget officer has compiled the following data regarding airport costs and activity over the past
You have been hired recently as a part-time cost analyst for your college's admissions office. Your first task is to estimate the relationship between the cost of operating the admissions office and
As a group, discuss whether direct labor is a fixed or a variable cost. What are the pros and cons of management treating direct labor as a variable cost? Are there ethical issues to be considered
What are the benefits of having the cost analysts and design engineers work side by side with the toy maker's manufacturing teams? "Taking Cues from GE, Mattel's CEO Wants Toy Maker to Grow Up," The
Briefly describe the JIT approach to production and inventory management.
List eight key features of a just-in-time inventory and production management system.
What is meant by TQC? Explain the importance of TQC in a JIT system.
List five features of JIT purchasing.
Define the following terms: CMS, JIT, AMHS, FMS, and CIM.
Briefly describe the key differences in plant layout between Aerotech's Phoenix and Bakersfield facilities.
How is a firm's cost structure likely to change if an FMS is installed?
Explain what is meant by off-line quality control, cellular manufacturing, and activity-based management.
List four techniques for reducing or eliminating nonvalue-added costs.
Give an example of activity sharing.
Evaluate the following statement: "A company should stop selling products to a customer that has been identified as unprofitable."
How can trend analysis of customer-related costs be helpful to management in a customer-profitability analysis?
What is meant by the following terms: continuous improvement, price down/cost down concept, target costing, target price, target cost, target profit, value engineering, and kaizen costing?
Which of the following terms is most consistent with the old saying, "Slow and steady wins the race": flexible manufacturing, advanced manufacturing system, product innovation, target costing, kaizen
What is meant by employee empowerment, benchmarking, best practices, and reengineering?
Explain how the concepts of continuous improvement and the theory of constraints are related.
Elimination of production bottleneck activities is an example of what management concept?
What behavioral problems can you think of that a company such as Aerotech might encounter in modifying its managerial-accounting system to fit today's manufacturing environment?
The following costs were incurred in each of two automobile-parts factories in June.Required: For every cost listed above, indicate whether it is more likely to be treated as a direct cost or an
Since you have always wanted to be an industrial baron, invent your own product and describe at least live steps used in its production.Required: Design a plant layout using the latest in advanced
Suppose you have just started a business to manufacture your newest invention, the photon gismo. Let's say you believe that after a few years on the market, photon gismos will sell for about
Analysis shows that Zodiac Corporation incurred the following five-year gross margin and cost histories in serving customer number 128.Required:1. Prepare a trend analysis (in terms of percentage of
Use the Internet to visit FedEx's website ( www.fedex.com ).Required: Read about the express delivery services provided by the company. Then discuss how FedEx could use customer profitability
The customer-profitability analysis for Aerotech Corporation, which is displayed in Exhibit 6-7. ranks customers by operating income. An alternative, often-used approach is to rank customers by sales
The continual search for the most effective method of accomplishing a task through comparison of existing methods and performance levels with those of other organizations or with other subunits
ElectroMobile Company (EMC) manufactures electric golf carts, electric all-terrain vehicles, and electric senior-citizen mobility scooters. Each of the three products has two or three models. Because
Borealis. Inc. manufactures special heavy bolts used in spacecraft. The production process consists of the following operations: ( 1 ) metal rods are cut to the proper length in a cutting machine;
Refer to the information given in the preceding problem for Borealis, Inc.Required: Identify the non-value-added costs that might be present in Borealis' traditional plant layout and production
Pacific Rim Enterprises' management recently decided to adopt a just-in-time inventory policy to curb steadily rising costs and free up cash for purposes of investment. The company anticipates that
Go shopping for groceries; then visit your bank and complete a relatively routine transaction. (Or, if that is inconvenient, think carefully about the last time you performed these
Pickwick Paper Company's Richmond plant manufactures paperboard. Its production process involves the following operations.1. Harvested trees arrive by rail in the wood yard and are stored outside.2.
ReadersNet.Com sells books and software over the Internet. A recent article in a trade journal has caught the attention of management, given that the company has experienced soaring inventory
AutoTech, Inc. is an automotive supplier that uses automatic screw machines to manufacture precision parts from steel bars. AutoTech's inventory of raw steel averages $$1,800,000$ with a turnover
Northern Lights Company manufactures a variety of small parts for the automotive industry. The company's manufacturing overhead cost budget for the current year is as follows:These budgeted overhead
Michael McKenna, manager of FarmCo's Service Division, dialed the division controller's number on his phone: "Janice, this is Mike McKenna. How's that JIT program doing? Has it saved us any
Worldwide Electronics Corporation ( WEC) is a seven-year-old company that developed a process to produce reliable electronic components at a cost below that of the competition. In seeking to expand
New South Wales Television Corporation manufactures TV sets in Australia, largely for the domestic market. Management has recently implemented a kaizen costing program, with the goal of reducing the
The Hospital Instruments Division of MedLife Technology Corporation manufactures a variety of electronic medical equipment. The principal product of the Hospital Instruments Division is a
Question:-How does flexible manufacturing help in cost management? "Ford: Europe Has a Better Idea," Business Week, April 22, 2002, pp. 84, 85, Christine Tierney and Kathleen Kerwin; "Ford Looks to
Question:-How do companies use customer-profitability analysis, which is an application of ABM. to cut costs and increase profits? "Germany's Commerzbank Aims to Shun Unprofitable Relationships," The
Question:-Do you think it is a sound strategy to demand a 5 percent price cut from suppliers across the board? What are the potential risks in such an approach to cost cutting? "Crunch Time for Parts
Question:-As a group, discuss the cost-cutting approaches cited in the article, and then discuss whether you think these measures make sense. Are such cost-cutting moves in the companies' best
Question:-How did Alcoa Inc. use activity-based costing? "Manufacturing Masters Its ABCs," Business Week, August 7, 2000, Hugh Filman. Overview Activity-based costing, a cost-assessment system, is
Why was Aerotech Corporation's management being misled by the traditional product-costing system? What mistakes were being made?
How can an activity-based costing system alleviate the problems Aerotech was having under its traditional. volume-based product-costing system?
List four objectives of a cost management system.
What is meant by the term non-value-added costs? Give four examples.
List and define the five ways that time is spent in a manufacturing process. Which of these types of activities are likely candidates for non-value-added activities? Why?
What is meant by a homogeneous cost pool?
Explain briefly why multidisciplinary ABC project teams arc used.
List eight indicators that suggest management should consider implementing a new product-costing system.
Seneca Falls Winery is a small, family-run operation in upstate New York. The winery produces two varieties of wine: riesling and chardonnay. Among the activities engaged in by the winery are the
Visit the website of a city, state, or Canadian province of your choosing (e.g., the City of Los Angeles, www.losangeles.com ).Required: Read about the services offered to the public by this
Meditech, Inc. manufactures two types of medical devices, Medform and Procel, and applies overhead on the basis of direct-labor hours. Anticipated overhead and direct-labor time for the upcoming
John Patrick has recently been hired as controller of Valdosta Vinyl Company (VVC), a manufacturer of vinyl siding used in residential construction. VVC has been in the vinyl siding business for many
Rapid City Radiology, Inc. manufactures chemicals used in radiological imaging systems. The controller has established the following activity cost pools and cost drivers.An order for 1,000 boxes of

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